Why Nationwide Building Society has some pretty rubbish governance

I spent today recovering from UNISON conference and trying to catch up on my post and emails.

I was completely ticked off when I responded to the ballot papers I had received while away for the Nationwide AGM next month. This is the biggest mutually owned building society in the world with some 14 million members.

The candidates for election or re-election to its Board appear to be entirely white, but only 2 of them are women. There are no employee or member representatives on the Board and as far as I can see in a move reminiscent of North Korea, only "approved" candidates had been allowed to stand and fill positions. I pointed out on the Nationwide AGM survey and twitter that they appear to have "a white middle class mates club" running this hugely important mutually owned organisation,

There appears to be 13 directors on the Board but only photos of 11 on the website. So I am unclear about the diversity of the entire Board.

Elsewhere in the annual report they claim that they expect by July 2015 to have 25% of women on Board and "33% of the entire director population (divisional directors and above) to be female and 8–15% of the entire director population to be Black Asian Minority Ethnic (BAME) by 2020".  Which until they explain more about divisional directors is entirely meaningless and would I think suggest that they can fulfill their target on "BAME" by only including less senior staff.

The final thing that drove up the blood pressure was reading the report on director remuneration (which was largely complete gobbledygook) and seeing that  the CEO's total pay had gone up from £2,571,000 in 2013/2014 to an unbelievable £3,278,000 in 2014/2015. An increase of over £700,000 in one year. Since 2009/10 it has over doubled from £1,539,000

This is just shocking and really disappointing. I have been a member of the Nationwide since a child. I hope that other members will like me vote against the annual report and the proposed directors (I withheld my vote on the female candidates).

What a mess the mutual movement is in when even the Nationwide acts as badly as their private sector counterparts.

Update: A member of the Building Societies Members Associations has pointed out that they have an article on their website here on Nationwide.

Its not an Equitable Life Henry if your pension has been robbed

On Friday I received a cheque for £46.13 from the UK government in compensation for its failure to regulate the Equitable Life.  It was estimated that I had a "relative loss" of £205.94 (including interest) out of a holding that should have been worth £1250.30 (see scan left). It was pro rata down to £46.13.

Equitable Life ran my Additional Voluntary Contributions (AVC) top up pension saving fund at Tower Hamlets Council. In 2000 the Equitable Life effectively became bankrupt due to an adverse House of Lords court judgement.

The 200 year old mutually owned Equitable Life had promised to pay savers a rate of return which due to changing market conditions was completely unaffordable.

The basis of the claim against the Government financial regulators (and others) at the time was that they had failed to regulate it properly and if they had then it wouldn't have failed.

I had only recently started saving with Equitable life and had 50% invested in a unit trust fund which was not directly affected. However, Equitable life was seen at the time as a leading pension and investment company and many people lost a massive chunk of their life savings.

The reasons for the collapse are complex and still under dispute but rubbish governance as well as poor regulation was at the heart of it. Equitable Life was the oldest mutual insurer but behaved almost as badly and as recklessly with policy holders money as any of the big privately owned banks did before 2007.

This is a lesson to all of us who believe in mutual ownership.   30,000 policy holders died before they could receive any compensation and probably less than 10% of losses are going to be compensated.

Check out Equitable Life Members Support Group